As I think I’ve mentioned before I get about three ideas for blog posts for each post that I actually begin writing and, of the posts I actually start writing, perhaps 25% end up in the bit bucket for various reasons. Right now, in reaction to the Slate series I mentioned below on income inequality, I’m mulling over the idea of writing a post on income inequality in the second ward of Chicago. Not the United States. Not Illinois. Not Cook County or even just Chicago. The Chicago second ward. Here’s a map of the Chicago wards if you’re not that familiar with the city.

My guess offhand is that there’s considerable income inequality just within that ward which includes a great deal of the Loop. (Indeed, there’s considerable income inequality just within zipcodes.) What are its sources? Social consequences? Political implications?

Is there anything to be learned from such an exercise? I’m not sure.

Here’s where I’m going with this. It’s unquestionably true that incomes among the top 5% of income earners are enormously higher than among the bottom 5% of income earners. No argument. Some attribute the increasing inequality to the ultra-rich having incomes that are too high. I think it’s that most people who aren’t among the rich (top 5% of income earners) don’t have higher incomes. However, incomes among the bottom 95% of American income earners are enormously higher than the incomes of the bottom 95% of Chinese income earners. What are the sources of that inequality? Social consequences? Political implications?

If there were a policy approach that would raise the incomes of 95% of Americans to the detriment of 95% of Chinese would it be moral? I know it might be politically popular here but would it be moral?

And here’s the hard one. If there were a policy approach that would raise the incomes of 95% of Chinese to the detriment of 95% of Americans would that be moral?

The easy way around such questions is to say that such decisions aren’t up to policy makers to make but IMO that’s simply a head fake. Policy makers make decisions that have implications of this sort practically every day and I sincerely doubt that our society will change into some sort of anarcho-capitalist Utopia in the foreseeable future.

Over the period of the last 30 years the incomes of poor people all over the world have risen spectacularly and, realistically, much of that increase was to the detriment of most income earners in the United States. These income earners are also consumers and in their role as consumers they’ve benefited from the lower costs of goods sold in the United States that have been a consequence of that change. For many it probably wasn’t that good a deal.

Reversing that trend (if such a thing be possible) would almost certainly mean reversing the betterment of lives (not everybody’s but a lot of people’s) in places other than the United States. Right thing to do?

Timothy Noah has begun a multi-part series on income inequality in the United States at Slate:

Today, the richest 1 percent account for 24 percent of the nation’s income. What caused this to happen? Over the next two weeks, I’ll try to answer that question by looking at all potential explanations—race, gender, the computer revolution, immigration, trade, government policies, the decline of labor, compensation policies on Wall Street and in executive suites, and education. Then I’ll explain why people who say we don’t need to worry about income inequality (there aren’t many of them) are wrong.

I look forward to reading the series, hoping that I’ll learning something, dreading that I won’t. Put me down as someone who would like to see greater income equality but isn’t convinced that the means that are being proposed to accomplish the objective will actually do so and is concerned that the unforeseen secondary effects of the measures being discussed are likely to overwhelm their primary effects.

So, for example, I don’t see re-distributing income from one group of people making $200,000 or more per year to another group of people making $200,000 or more per year as a great advance in the cause of greater income equality.

My ideal society is one that more closely approximates Jefferson’s yeoman-farmers than it does that of say, Mexico City, but I’m concerned that we’re trending more towards the latter than the former. I’m not sure what the contemporary equivalent of Jefferson’s vision might be nor do I know how it might be accomplished in an age in which labor, capital, information, and goods cross borders with ease.

Chicago Mayor Richard M. Daley has announced that he will not seek a seventh term in 2011:

Mayor Richard Daley says he will not run for re-election in 2011, saying it’s “time for me, it’s time for Chicago to move on.”

“The truth is I have been thinking about this for the past several months,” Daley said at a City Hall news conference that stunned the city. “In the end this is a personal decision, no more, no less.”

His wife Maggie stood by his side with the help of a crutch, smiling broadly as the mayor continued: “I have always known that people want you to work hard for them. Clearly, they won’t always agree with you. Obviously, they don’t like it when you make a mistake. But at all times, they expect you to lead, to make difficult decisions, rooted in what’s right for them.

“For 21 years, that’s what I’ve tried to do,” he said. “But today, I am announcing that I will not seek a 7th term as mayor of the city of Chicago.

“Simply put, it’s time,” said Daley, 68. “Time for me, it’s time for Chicago to move on.”

It’s hard to imagine how important an announcement this is, at the very least for Chicago. Richard Daley has been preparing to run for mayor, running for mayor, or serving as mayor for nearly half a century. Some of those who’ll vote for the first time in 2011 can’t remember a time when Daley wasn’t mayor.

Let the speculations begin! We’re going to see a lot of jockeying, horse-trading, speculating, and downright confabulation over the next couple of months. Many of the candidates that will be pondered over are unknown outside the city of Chicago. Some of them are probably unknown outside their own wards.

Here are some of the names that have already surfaced:

Among aldermen discussed as potential mayoral candidates are Robert Fioretti, 2nd; Sandi Jackson, 7th; Thomas Allen, 38th; Scott Waguespack, 32nd; Brendan Reilly, 42nd; and Thomas Tunney, 44th.

Earlier this year, White House chief of staff Rahm Emanuel voiced his mayoral ambitions. But the former North Side congressman quickly added that he wouldn’t take on Daley, for whom he served as a strategist and fundraiser in the mayor’s first winning bid. Likewise, Cook County Sheriff Tom Dart said he won’t run for mayor unless the office is open.

Outgoing Cook County Assessor James Houlihan, by contrast, was considered a potential candidate whether or not Daley runs again. Former Chicago Inspector General David Hoffman also has been mentioned, but he just lost a grueling Democratic U.S. Senate primary.

I think that Daley’s absence from the field poses some interesting questions. Will the black power structure in Chicago be able to solidify around a single candidate early on? And will we see a Hispanic candidate this cycle?

I don’t think that Karl Smith understands the concept of indirect production.

As an example of what I mean back in 1900 many, many more adults made their livings as farmers than do now. We actually have less farmland now than we did then. Nonetheless we’re producing more food.

I note in passing that Karl Smith does not appear to be a farmer or a miner or a worker in a factory. Somehow he manages to make a living. How can this be?

Might I suggest it’s because we have thousands and thousands of people in advertising, marketing, finance, and a million other areas that aren’t in direct production but do contribute to indirect production.

Today the supply chain is long, stretching around the world.

The first place the Schulers from whom I am descended set up shop in the United States was in Louisville, Kentucky. I’m not entirely sure why this was. They emigrated in New Orleans, made their way up the Mississippi, and then the Ohio, settling in Louisville. It might have been because siblings or cousins of my great-great-grandfather’s had already moved there from Switzerland. I’m not really sure. But most of the Schulers in the United States to whom I am actually related, very distantly but related, live in that area along the Ohio River where Ohio, Indiana, and Kentucky meet.

When I was a kid, more than a half century ago, we used to visit Louisville every few years to see family living there. Schulers and lots of people whose surnames began with Z, mostly of my dad’s generation or the one before. That stopped once my youngest siblings had come along. Five kids does tend to tie you down a bit (not for long: by the time my youngest siblings were five we were travelling as a family all over the country).

When my dad died we lost touch with that side of the family entirely.

After my mom died and, partially moved by the vast number of photos we’ve uncovered, I’ve begun putting out a few feelers to my distant cousins in Louisville. We’ll see what happens.

As in favor as I am of improving rail transport in the United States, I can’t say I’m overly impressed by President Obama’s proposal to build or refurbish 4,000 miles of track:

WASHINGTON (AP) — President Barack Obama is asking Congress to approve at least $50 billion in long-term investments in the nation’s roads, railways and runways in a pre-election effort to show he’s trying to stimulate the sputtering economy.

The infrastructure investments are part of a package of targeted proposals the White House announced on Monday. With November’s elections for control of Congress approaching, Obama planned to discuss the proposal later Monday at a Labor Day event in Milwaukee.

[…]

The officials said the initial $50 billion would be the beginning of a six-year program of transportation improvements, but they did not give an overall figure. The proposal has a longer-range focus than last year’s economic stimulus bill, which was more targeted on immediate job creation.

The goals of the infrastructure plan include: rebuilding 150,000 miles of roads; constructing and maintaining 4,000 miles of railways, enough to go coast-to-coast; shorter, high speed rail projects; and rehabilitating or reconstructing 150 miles of airport runways, while also installing a next generation air navigation system designed to reduce travel times and delays.

I know it sounds like a lot but it’s a spit in the ocean. As of 2008 the United States had 120,000 active miles of Class I freight track. When you add passenger track and other track we’ve got nearly a quarter million miles of track. 4,000 miles is just a couple of percent of that.

In 1942 we had a half million miles of railroad track in the United States. I weep whenever I see old freight track being pulled up for scrap, the roadbeds being turned to other uses.

Do we really believe that highway and air traffic are the transport of the future? Quite to the contrary I don’t think we’d see truck transport at the level it is today without its massive subsidies. The raw cost of truck transport is a multiple of rail or barge transport.

In current dollars refurbishing track costs about $350,000 per mile (off hand I’d guess it would be considerably more in cities). Let’s just guesstimate the cost to rehab at $1 million per mile. Estimating the cost of roads is tricky, as the federal estimation guidelines suggest. Say between $1 million and $80 million per mile (that’s what H-3 cost). That would mean that the President is planning to spend $4 billion on rail, probably the same amount on runways, and $42 billion on highways.

I don’t think this scattershot approach to transport makes any economic sense but it makes all of the political sense in the world. It reminds me of Mayor Daley’s spreading a little money around in the wards before a mayoral and aldermanic election. Not only does it get the incumbent members of the City Council behind you, it looks good to the voters without actually changing how the real money is being spent.

Paul Krugman continues to ride his hobby:

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The economic moral is clear: when the economy is deeply depressed, the usual rules don’t apply. Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.

As I have said before I am not opposed in principle to fiscal stimulus via deficit spending. I’d be a lot more comfortable with Dr. Krugman’s prescription if it had more empirical support than it does, if there were reason to believe the (n+1)^th dollar of deficit spending is no less effective than the n^th (remember, with the exception of a handful of years we’ve been running massive deficits for decades), and if I had greater confidence that the actual programs that would be enacted for fiscal stimulus via deficit spending would actually increase aggregate demand rather than partly increasing aggregate demand but largely transferring income from one group of the top 5% of income earners to a different group of the same bracket.

To be completely honest I’ve got to admit that I’m finding the phrase “aggregate demand” increasingly irritating. I think that “increasing aggregate demand” is mostly just a euphemism for spending money on pet projects.

And as I’ve said before I’d like to hear Dr. Krugman’s ideas for paying off the debt he’s recommending that we incur. He’s not innumerate. Surely he recognizes that there’s no foreseeable level of economic growth that will allow us to pay off an additional $2 trillion in debt in the foreseeable future. Unlike the situation following WWII, ours won’t be the world’s only functioning industrial economy.

What level of increased taxes would be required to do so? How would that reduce future growth? What if growth in the medium term, say, five to ten years remains stubbornly below the level required for actual job creation? Keep spending?

Fareed Zakaria has opened up some old wounds with his recent column on 9/11, asserting that we over-reacted to the events of that awful day. Go to the link if you wish to read his take. James Joyner makes the proper reply that at this point we can’t really know what role our invasions of Afghanistan and Iraq actually played in producing Al Qaeda’s current reduced operational status.

I find the inevitable ensuing discussions dreary and unproductive. I made the point I wanted to back in the comments of the post and won’t return to the snakepit I’m sure it will become.

However, there was one thing about the comments that I wanted to point out. Why do people confuse justification with prudence? The arguments about Iraq these days mostly center on after the fact assessments in flat contradiction of what sincere, intelligent people of good will not only the United States but also in France, England, Russia, and China believed about Iraq in the years leading up to our invasion of Iraq.

What I find fascinating is that people on both sides of the argument—those who continue to support our invasion of Iraq and those who opposed (or have come to oppose it)—appear to hold a similar view, namely that if the invasion could be justified then it was the right thing to do. Some who now oppose the invasion certainly appear to me to be arguing the appeal to consequences fallacy, i.e. they’re denying it could have been justified because they don’t believe it was the right thing to do (rather than the other way around).

In my view whether the invasion was justified is largely moot. More important is whether it could have been brought to a successful conclusion in a timeframe and at a cost acceptable to the American people. If not (as I believed then and feel perfectly vindicated in having believed), then all the justification in the world wouldn’t have made it prudent.

Whether the war in Iraq will be deemed to have been successful from our point of view remains to be seen. If Iraq is a functioning liberal democracy in ten years, it might well be deemed successful. I think the odds are pretty long.

A thriller about the search for a fish containing a secret message. Working title: The Da Vinci Cod.